AbstractTo successfully survive in plants, endophytes need strategies to avoid being detected by the plant immune system, as the cell walls of endophytes contain easily detectible chitin. It is possible that endophytes “hide” this chitin from the plant immune system by modifying it, or oligomers derived from it, using chitin deacetylases (CDA). To explore this hypothesis, we identified and expressed a CDA from Pestalotiopsis sp. (PesCDA), an endophytic fungus, in E. coli and characterized this enzyme and its chitosan oligomer products. We found that when PesCDA modifies chitin oligomers, the products are partially deacetylated chitosan oligomers with a specific acetylation pattern: GlcNAc-GlcNAc-(GlcN)_n-GlcNAc (n ≥ 1). Then, in a bioactivity assay where suspension-cultured rice cells were incubated with the PesCDA products (processed chitin hexamers), we found that, unlike the substrate hexamers, chitosan oligomer products no longer elicited the plant immune system. Thus, this endophytic enzyme can prevent the endophyte from being recognized by the plant immune system; this might represent a more general hypothesis for how certain fungi are able to live in or on their hosts.